IPO: Drug Discovery Firm Recursion Pharma Debuts On Markets
Recursion Pharmaceuticals, a company using machine learning to hunt for new drugs and therapies for ailments, has raised $436 million from an initial public offering (IPO) and begun trading on the public markets. It sold roughly 24.2 million shares for $18 each to raise that amount.
Recursion Pharma filed for an IPO last month in March. Debuting at $18 per share on the markets, it closed trading on Friday up more than 70% at $31.34, giving it a market value of over $5 billion.
- A seven-year-old company, Recursion is part of a group of companies that emerged in the past few years to harness the rapid development and improvement in artificial intelligence and machine learning technologies in recent years and apply them to drug discovery.
- Recursion uses AI and machine learning to help discover new drugs. Its customers are primarily pharmaceutical companies such as Bayer, which has a collaborative agreement with it to seek new drugs for fibrotic diseases. Bayer bought a $50 million stake in Recursion last year as part of a $239 million Series D funding round.
- Recursion currently has 4 clinical-stage drug discovery programs in its pipeline. Still in its early stages, the company made a minuscule $4 million in revenue in 2020. It spent nearly $90 million operating in the same year, with its biggest expense being $63 million on R&D spend.
- Recursion is like many publicly-traded biotech companies, still in its early stage with minuscule revenue but big promises and ambitions. Its main pitch now appears to be selling enthusiasm for the drug discovery market to investors who have evidently bought into it given the company’s $5 billion+ market value.
- Recursion Pharma raised nearly half a billion dollars in funding privately before its IPO.